Insurance Australia Group

Insurance Australia Group Limited

Type	Public (ASX:IAG)
Founded	2000 (renamed from NRMA Insurance Group in 2002)
Headquarters	Sydney, Australia
Area served	Australia New Zealand United Kingdom Thailand Malaysia China
Key people	James Strong AO, Chairman Michael Wilkins, CEO
Industry	Insurance
Products	General, commercial, vehicle, home and contents insurance, roadside assistance
Revenue	▲ A$7,842 million (2009)
Operating income	▼ A$377 million (2009)
Profit	▼ A$181 million (2009)
Employees	13,500
Subsidiaries	NRMA Insurance, CGU Insurance, SGIO, SGIC, Swann Insurance, NZI, State Insurance, China Automobile Association[1]NZI Thailand, Safety Insurance, AmAssurance, Equity Red Star, Equity Direct Broking
Website	www.iag.com.au

Insurance Australia Group Limited (IAG) is an Australian publicly-listed company with its shares traded on the Australian Stock Exchange as ASX: IAG.

The company was formed by the demutualisation of the NRMA Insurance business in July 2000 and a return of shares to the members of NRMA. According to its website, NRMA Insurance Group Limited changed its name to Insurance Australia Group Limited on 15 January 2002. IAG is the name of the listed entity; it is not a customer-facing retail name, however it represents the holding company that holds the many retail brands together.

Insurance business

Insurance Australia Group operates a number of different insurance brands in Australia, Asia and the UK including:

Australia

• NRMA Insurance
• SGIO, acquired in 1998
• SGIC, acquired in 1998
• CGU Insurance, acquired in 2003
• Swann Insurance, acquired in 2003
• The Buzz Insurance, formed in 2009

IAG has a 70% shareholding in Insurance Manufacturers of Australia Limited (the other 30% being held by RACV), which issues insurance under the RACV Insurance name that is sold by RACV.

One of IAG's competitors in Australia is Suncorp-Metway Limited, who operates the Suncorp, GIO, AAMI, Vero, Just Car and other insurance brands.

New Zealand

• State Insurance, acquired in 2001
• NZI (Insurance NZ), acquired in 2003
• NAC
• Mike Henry Travel
• Driveright
• Lantern
• Swann Insurance

United Kingdom

• Equity Insurance Group, acquired in 2006

Asia

• Safety Insurance, Thailand, held a stake in 1998, now holds 96% voting rights
• NZI Thailand, acquired in 2003
• AmAssurance, Malaysia, (49% ownership of AmG Insurance, which is part of AmAssurance)

Other business

In China, Insurance Australia Group owns CAA, the China Automobile Association, the largest roadside assistance provider in the country. IAG held a stake in CAA since 1999, increasing to full ownership in 2003.

Executive structure

Board of Directors

• James Strong AO, Chairman. Also chairman of Woolworths Limited and Australian Council for the Arts. Also on the board of QANTAS.
• Michael Wilkins, CEO
• Hugh Fletcher^[1], Non-executive director
• Anna Hynes^[1], Non-executive director
• Phillip Colebatch, Non-executive director
• Yasmin Allen, Non-executive director
• Phillip Twyman, Non-executive director

Executive team

• Michael Wilkins, CEO Insurance Australia Group
• Justin Breheny, CEO IAG Asia
• Nicholas Hawkins, Group Chief Financial Officer
• Andy Cornish, CEO Direct Insurance
• Jacki Johnson, CEO The Buzz Insurance
• Duncan West, CEO CGU Insurance
• Neil Utley, CEO IAG United Kingdom
• Ian Foy, CEO IAG New Zealand
• Leona Murphy, Group Executive, Corporate Office

Sustainability

On 31 August 2006, IAG was placed on the Dow Jones Sustainability Index^[2]. IAG is the first Australian insurance company to achieve this recognition.

On 15 November 2006, IAG announced it intended to become carbon neutral within five years across all of its operations.^[3]

QBE merger speculation

In 2004, speculation emerged that IAG would merge with Australia's largest insurer QBE Insurance however IAG denied the merger at the time.^[4] Speculation again emerged in 2006 only to be again denied.^[5]

In April 2008, QBE began a series of friendly merger talks with IAG. On 10 April 2008, QBE proposed a takeover with each IAG share being exchanged for 0.135 QBE shares plus 50 cents cash (an effective value of $3.75 per IAG share at the time). This proposal was rejected by the IAG board the next day. QBE responded by increasing its proposal to 0.142 QBE shares plus 70 cents per IAG share. On 14 April 2008, IAG also rejected this proposal. On 16 May 2008, QBE increased its proposal to 0.145 QBE shares plus 90 cents per IAG share (an effective value of $4.60 per IAG share at the time). This was rejected by IAG four days later and on 21 May 2008 QBE confirmed talks had collapsed and withdrew its proposal.^[6]

Important items that were considered when QBE made its proposal : IAG’s short tail personal insurance products are distributed in Victoria under the RACV brand, via a distribution relationship and underwriting joint venture with RACV Limited. These products are distributed by RACV and manufactured by Insurance Manufacturers of Australia Pty Limited (IMA), which is 70% owned by IAG and 30% by RACV. If one of IMA’s shareholders were to experience a change of control, the other has a pre-emptive right to acquire that shareholder’s interest in IMA at market value. The duration of the arrangements governing RACV’s distribution of RACV-branded products in Victoria would be a relevant factor in determining this market value (as would the duration of the arrangements governing IMA’s reinsurance of NRMA-branded products in NSW and the ACT).

See also

• NRMA

References

This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (December 2006)

1. ^ ^{a b} "Media release: IAG board appointments" (PDF). Insurance Australia Group. 30 August 2007. http://www.iag.com.au/news/shareholder/docs/20070830-Board_Appointments_two_directors.pdf. Retrieved 2007-09-06. 
2. ^ Dow Jones Sustainability Index 2006
3. ^ "Carbon Neutral Announcement Media Release" (PDF). IAG Website. http://www.iag.com.au/pub/iag/sustainability/media/carbon_neutral.pdf. Retrieved 2007-02-25. 
4. ^ Hoyle, Simon (October 6, 2004). "Insurance duo tipped to tie the knot". The Age. http://www.theage.com.au/articles/2004/10/05/1096949514339.html. 
5. ^ "QBE, IAG hose down takeover rumour". The Age. January 13, 2006. http://www.theage.com.au/news/Business/QBE-IAG-hose-down-takeover-rumour/2006/01/13/1137118962951.html. 
6. ^ "Public offers and proposals (FAQ)". IAG. http://www.iag.com.au/shareholder/offers/index.shtml. Retrieved 8 February 2008. 

External links

• Insurance Australia Group

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